What You Should Know Before Buying a Foreclosure

Who doesn't want to save money when they're ready to buy a house?  A foreclosed house can appear to be an attractive option. There is no doubt that foreclosed homes sell for less, sometimes much less, than homes listed and sold on the open market by real estate agents and owners.

Unless you're a professional real estate investor, it can be difficult to purchase a foreclosed property. Some foreclosed homes have so much damage that the repairs required to make them habitable quickly deplete any savings on their sales prices. Plus, you'll be competing with others who make their living by buying, repairing, and selling foreclosures. 

As you can see, buying a foreclosure can be a huge challenge. Here are some tips you should know before buying a foreclosed home…

Foreclosed Homes Come With Risks

While a foreclosure is a profitable investment, it also comes with the previous owner’s problems. Here are some of the most commonly seen problems:

Financial Risks

Outstanding debts such as back taxes and liens are frequently attached to auction properties. As a result, an otherwise desirable home may be subject to further costs. Before the buying process can begin, any outstanding debts must be satisfied.

This primarily applies to properties that are being auctioned off. Before reselling a property, banks pay off any liens attached to it.

Physical Risks 

Keep in mind when buying a foreclosure that the risk may greatly exceed the potential reward.

If the home is still being occupied, it may be poorly maintained. If the people can’t make the payments, they could well be falling behind on maintenance and repairs.

Some people facing foreclosure are enraged, and they may take out their frustrations on their home before the bank repossesses it. This could mean taking appliances, light fixtures, and any other valuable pieces of the home upon departing.

Another thing to consider is if you buy a foreclosure at an auction, you won’t get the opportunity to inspect the inside, and you are buying the home sight unseen. 

Foreclosures Attract Competition

When dealing with desirable foreclosed properties, increased interest and competition is unavoidable, not only from potential occupants but also from investors and professional house flippers. Foreclosed homes priced competitively can attract many offers quickly, resulting in a bidding war, which can turn a bargain into a costly investment.

Purchases of foreclosed homes quite often fall through, so you could potentially see your desired property appear back in the inventory if you check periodically.

Foreclosure Purchases Can Be a Long Process

The closing of a foreclosure typically requires additional documents to be completed. On top of that, response times between the bank and other parties involved with real estate-owned properties can be pretty slow. You may have to wait longer than you’d like after putting in a bid on a property as well, especially if the bank is processing many other requests.

If you intend to finance the purchase, you should get a mortgage pre-approval. It is likely to quicken the process.

In Conclusion

Foreclosed homes can appear very appealing on the surface. However, costs can be highly unpredictable, and underlying damage may render a property unmarketable. Some people may reconsider buying due to the lengthy process, while others may be turned away by the high demand for attractive foreclosed properties.

Foreclosures can sometimes wind up being incredible deals. With all of this being said, our Realtors at 316 Realty Group are more than willing to assist you in the process. Reach out to us today and let’s get started!

Housing Market 2022: Should You Wait?

Low inventory, fierce competition, and major price increases have impacted homebuyers since 2020, but quickly rising mortgage rates are making it even more difficult to find an affordable house. Due to the higher rates, many buyers can no longer afford homes in certain price ranges. The issue is that even basic single homes now cost the same as more upscale homes did a few years ago, so purchasers are forced to choose between waiting for additional inventory to come online or moving to a more inexpensive neighborhood. Many others are hoping for a price drop, but that may not happen anytime soon.

But if you're a prospective homeowner waiting for the market to plummet, you may be wasting your time by doing so. 

It’s A Decision Personal to You

An investment in real estate is an extremely personal decision regardless of the market. After all, a home is the most expensive purchase most people will make in their lifetime, so being financially prepared is crucial. It would greatly benefit you as well to speak with a lender and even use a mortgage calculator to find out how much your monthly mortgage payments will be based on your down payment and interest rate.

Trying to time the market or predict what will happen next year is not the greatest way to buy a home. Instead, buy based on your budget and requirements. If you find a home you like in a desirable location that also meets your budget, it may be right for you. However, if you make too many concessions to obtain a home, you may wind up with buyer's remorse and feel burdened. 

Buying in a Hot Housing Market

A hard fact is that you can’t return a house if you realize you overpaid for it or you don’t like it! In this market, buyers tend to make hasty decisions which can inevitably lead to buyer’s remorse. 

Begin with a budget in mind and commit to sticking with it! Despite a minor increase in the number of homes for sale, purchasers are still faced with high prices and mortgage rates at the 6% level. 

Again, you must consider your financial situation when buying a home. Is it financially feasible for you? Experts generally agree that for many people, purchasing and owning a home is a better financial decision than renting. It is never a bad investment if you can afford it. 

Selling in a Hot Housing Market

The first step toward a successful sale is to find a real estate agent who has a vast knowledge of the area and who you know you can trust. The right agent will work closely with you to price your home competitively while addressing questions and offers from prospective buyers.

A hot market will be full of homes being sold “as-is,” and a lot of them will sell as such, but it is still a wise move to make smart and methodical decisions regarding updates and renovations. Some inexpensive moves could be fresh paint, clean staging, and organizing. 

So, to Wait or Not to Wait?

There are thousands of examples out there that point to people who thought the market would come down one day, but it never did, causing them to lose years of equity. In other words, if you're waiting for home prices to significantly decline, you could be waiting for a very long time. 

If you’re ready, our team at 316 Realty Group is more than prepared to assist you in the process of buying or selling, and we can form a game plan just for you. Contact us today and let’s get started!

Why Should I Buy a House in Texas?

Texas is attracting people. Its population is one of the fastest-growing in the country. In 2020, over 15% of houses sold were to out-of-state buyers! There’s no denying it, people are flocking from all over to experience what Texas has to offer. From the strong job market to the low cost of living, to the diverse culture, the list goes on. There are endless reasons people are making Texas their new home. Read on to learn more about why you should buy a house in Texas!

Strong & Diverse Job Market

The state's booming economy, which creates more than 1,000 jobs a day, makes it easy to find a job in Texas. Although the state's unemployment rate remains below the national average, many of those jobs pay well above average. Something you may not know about is all of the huge companies that have recently moved to Texas, including Charles Schwab, Oracle, Hewlett Packard Enterprise, CBRE, NRG Energy, AECOM, Tesla, and Apple! 

The diversity in the job market is astounding, and there is sure to be something for everyone. The fastest-growing industry sectors are information technology, engineering, healthcare manufacturing/construction, education, business, oil and gas services, financial services, aerospace, and real estate. A recent statistic by the Texas Workforce Commission also states that Texas added 62,800 total nonagricultural jobs in April 2022, marking the sixth consecutive month of job growth!

Low Cost of Living

You will find  that your hard-earned money stretches further in Texas, all thanks to s cost of living that is 8% lower than the national average (and 15th lowest in the nation!) You can expect to enjoy a higher standard of living in Texas, thanks to strong wages and lower prices for groceries.

People from out-of-state may be pleasantly surprised to find out that there is no personal income tax in Texas, which is just another reason their money may go further. This is definitely an incentive that attracts people to the great state. Nevertheless, Texas relies on property taxes, which can vary from 1% to 3.5% of tax appraised value, set by each county. There are also exemptions that can lower property taxes, such as those for agriculture, your primary residence, over 65 years old, disabled veterans, and widows.

Vibrant & Diverse Culture

The rich, thriving culture of Texas is largely due to its diverse population. There are 145 languages spoken in Houston itself, and the state of Texas as a whole has the second most racial and cultural diversity in the country (right behind California.) This proves that the typical Texas stereotypes of horseback-riding-country folk couldn’t be further from the truth!

Attractions & Activities

Whether you are a sports fanatic, an outdoor enthusiast, or a total foodie, you won’t find yourself searching to stay busy and entertained in Texas. From the Texas Longhorns to the Houston Astros, to the Dallas Mavericks, fans take their sports seriously here and there’s always a team to root for. 

There are also endless outdoor activities to stay busy year-round. There is no shortage of destinations for hiking, biking, horseback riding, and outdoor dining. Whether you have a family with children or are seeking the singles scene, there is more than enough for everyone in any given town or city.

Ready to Make the Move?

We could go on forever about what makes the Lone Star state so great, but you will just have to see it for yourself! Our team of real estate professionals with 316 Realty Group are equipped and ready to assist you in every step of your move. You might be interested to know that we actually helped over 100 west coast families move to Texas in 2021! 

In order to assist clients moving to Texas, we offer a seamless concierge service. Our goal is to make the transition to Texas as smooth as possible. Reach out to our team today so we can share with you all we have to offer. It is our passion to assist you in every way we can!